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Why is Switzerland importing Russian gold?

Despite sanctions currently in place, Switzerland imported several tonnes of gold from Russia in May. Has Switzerland broken any rules?

Why is Switzerland importing Russian gold?
Switzerland to stop importing gold from Russia. Photo: Pixabay

More than three tonnes of gold, worth around $200 million, were shipped from Russia to Switzerland in May, nearly two months after the beginning of war in Ukraine, according to media reports based on data from the Federal Office for Customs and Border Security.

While questions may arise why Switzerland, which adopted EU sanctions against Russia on February 28th, is still trading with Moscow, this move is not breaking any rules.

That’s because sanctions are not targetting commercial gold shipments, even though “many banks, shippers and refiners stopped dealing with Russian metal after the conflict in Ukraine began”, according to a report in Reuters.

In fact, Switzerland is an important hub in the international gold trade, with its four major refineries producing two-thirds of the world’s gold. Interestingly, all four have denied importing from Russia after the invasion.

Meanwhile, the news of the imports has sparked criticism.

Marc Ummel, head of raw materials at Swissaid humanitarian aid organization, fears that proceeds from the gold will be used to finance the war.

The gold imports caused much debate on social media and internet forums.

One critical social media user pointed to the link between the latest shipment and Switzerland’s wartime practices: “The first things that come to mind when you think of Switzerland are dodgy bankers and Nazi gold”.

“How very Switzerland of them”, another critic wrote.

READ MORE: Sanctions on Russia: Is Switzerland still a neutral nation?

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Switzerland bans imports of Russian gold

Switzerland, a key refiner and manufacturer of gold bars, is banning imports of the precious metal from Russia, the government said Wednesday.

Switzerland bans imports of Russian gold

The central government aligned itself with EU sanctions which, on July 21, added a ban on gold imports of Russian origin to the list of restrictions following Moscow’s invasion of Ukraine.

The ban came into effect at 6:00 pm on Wednesday, Switzerland’s Federal Council said in a statement.

Under the new sanctions, Switzerland forbids “buying, importing or transporting gold and gold products from Russia”, the statement said, adding that “services in connection with these goods are also prohibited”.

Traditionally neutral, Switzerland broke with its usual stance in the days after the start of the war in Ukraine by aligning itself with European Union economic sanctions.

In May, three tons of gold from Russia were imported from Britain, but it was not clear which company was responsible for bringing it to Switzerland, Bloomberg News reported.

The Swiss Association of Manufacturers and Traders in Precious Metals (ASFCMP), which represents the country’s largest refineries, contacted its members and said none of them were responsible for the imports.

The association insisted that “doubtful gold” had “no place in Switzerland” and urged its members to act “with the utmost caution”.

Swiss customs said at the time they were examining the imports in light of the sanctions, but insisted that gold imports from Russia were not banned.

While gold exports were already subject to sanctions, imports were not banned under the sanctions order, customs officials said.

The fourth package of sanctions imposed by the EU included luxury goods, banning the sale, supply, transfer or export of luxury goods to Russia, including gold, silver, pearls and diamonds.

But on July 21, the EU also explicitly added a ban on importing gold from Russia, including in the form of powder, debris or gold coins.

Switzerland has several refineries to recycle gold and melt ingots.

The sector employs 1,500 people, according to ASFCMP.